Closing Bell - Closing Bell Overtime: 12/17/25

Episode Date: December 17, 2025

From the open to the close, “Closing Bell” and “Closing Bell: Overtime” have you covered. From what’s driving market moves to how investors are reacting, Scott Wapner, Jon Fortt, Morgan Brennan and Michael Santoli guide listeners through each trading session and bring to you some of the biggest names in business. Hosted by Simplecast, an AdsWizz company. See pcm.adswizz.com for information about our collection and use of personal data for advertising.

That bell marks the end of regulation. J-Lens 500, Jewish advocacy ETF bringing the closing bell at the New York Stock Exchange, Tiziana Life Sciences, doing the honors at the NASDAQ, and it's a down day for stocks. The Dow, down more than 200 points, four straight losing day for the S&P 500, down 1%. The NASDAQ lower by more than 1 and 3 quarters. And falling into the close, once again, blame Oracle. The stock's down 5% today, 20% in the week, as it tries to quiet, concerns about its data center project in Michigan. More on Oracle and the ripples across the AI trade coming up. Home builders. Following meanwhile, Lanar leading the way down after its

results, weak consumer confidence, it says, hurting home sales and Medline shares jumping in its debut, 40% above the offer price. More on that coming up. And oil bouncing back from near five year lows. That says President Trump is getting tougher on Venezuela, which he will address in a speech this evening. That's the square card on Wall Street. Welcome to closing bell overtime. I'm Morgan Brennan, along with John Fort. Silver hitting another record high today. The medal now up more than 125% this year. Can this possibly continue into 2026?

We're going to talk to the CEO of a top silver miner. And Robin Hood getting deeper into the predictions market, letting users combine outcomes or what's known in the gambling world as a parlay. We're going to talk to an analyst who calls the stock goodbye. And President Trump, considering an executive order that would limit defense contractors doing business with the government from buying back stock or paying shareholder dividends. There might be caps on executive compensation. Stocks only down slightly.

Our market's ignoring the potential impact. We're going to dig into all of those policy possibilities. For now, let's begin with the latest AI selloff kicked off by Oracle, but reaching every corner of the trade, Sima Modi has a detail. Well, John Tech was the worst performing sector today as questions circulate around the financing of these mega data center projects. Oracle specifically ending the day down over 5% even after the company came out and said that FT's story is wrong and that its Michigan data center is on schedule. Oracle adding that its development partner-related digital is in final negotiations with a competitive group.

But this negative sentiment surrounding AI extending to other names like Corweave as it navigates its own buildout of data centers, semiconductors like Broadcom, Nvidia, and Micron ahead of its report, all trading lower on the day. And then those AI industrial companies that make the parts that go inside the data center, selling off on concerns that any delay could pose a challenge. There's Eaton, Vertive, GE, Renova, which is playing a key role in developing gas power for the hypers, seeing its stockfall over 10% on the day. And then there's companies involved in building servers like Dell, HPE, Super Microdown over 5%. In iron, this is the Bitcoin Minor Turned Data Center developer closing down by more than 7% on the day. Amazon also lower after the company revealing it's in talks to invest about $10 billion in CHAPT maker, OpenAI, just towards the closes and it down by around half a percent.

Morgan? All right. Sima Modi, thank you. Now let's get to the bond market. Yields flat today ahead of Friday's inflation report. Rick Santelli is in Chicago Thursday's inflation report, if I'm not mistaken, Rick. Yes, yes. You know, we have a lot of activity in the next couple of days, Morgan.

So make sure everybody sets their clocks. Tomorrow morning at 7 o'clock Eastern, the MPC Monetary Policy Committee of the Bank of England will meet their schedule to lower rates from 4 to 375, 815. Tomorrow, the ECB is supposed to remain on hold. And finally on Friday, Bank of Japan looks to raise rates, 25 basis points, toy whopping 3 quarters of 1%. Let's look at two-year notes for today.

You see that chart? They're hovering at the lows of this session. As a matter of fact, they are the only maturity, really, whose yields are lower prices or higher. The rest of the curve is either near on change or the very long yields are slightly higher. Curves steepening again today. Two-year-on pace for the lowest yield closed since the 3rd of December. Let's call that exactly two weeks.

Now, let's get back to those central bank issues. If you look at a 10-year boom, today it closed at a nine-month high yield of 2.86%. And on the Japanese side, their tenure continues to rise. Right now, it's just whisker below 2%. These are fresh 18-year high yield closes. John, back to you. Rick Santelli, thank you. Meantime, Micron results are out.

Stocks higher by about 5% initially. Christina Parts of Nevelace has the numbers. Christina. Yeah, that's because there's a substantial beat across the board for this memory maker, starting with EPS in the quarter for $4.78 cents higher than the street anticipated on revenues of 13.64 billion. So very strong beat there for Q1. In regards to Q1 non-gap gross margins, which is a big concern for a lot of these chip names, 56%. The street was

anticipating 52%, so stronger there. For Q2 guidance, the company's saying in their statement, our Q2 outlook reflects substantial records across revenue, gross margins, EPS, and free cash flow, and we anticipate our business performance to continue strengthening in fiscal 2026. And here are those numbers. Q2 EPS guide of $8.42. Yes, I have to say, double check this. $8.42 the street was anticipating $4.78 on Q2 revenue guide of $18.7 billion, also higher than the street. Non-gap gross margins going up substantially to 68%. The company is guiding 68% versus the 54% the street was anticipating. And so that is why you were seeing the stock pop. Keep in mind, There has been quite a run-up in this company just over the year to date, up 165% into this print.

So perhaps some was priced in, but nonetheless, quite a reaction, guys. Yeah, up six and a half now. Christina, thank you. Meantime, it was yet another day where the AI narrative had the market swinging back and forth. So as we head into 2026, how should investors distinguish what's a move led purely by an AI headline and what's a real concern for the market? Joining us now are Doug Pita. He is chief U.S. investment strategist at BCA Research, and Matt Stuckey,

Chief Portfolio Manager at Northwestern Mutual Wealth Management. Guys, welcome. Let's see. Matt, how should investors treat this AI turbulence in a market that's still richly valued on the expectation that the AI economy will actually materialize? I'm thinking about some mature investors who are less diversified than usual historically leaning into stocks and perhaps growth. Look, I mean, I think the recommendation,

from our firm is the same regardless of whether or not you know this continues on in 2026 and it's 2027 in terms of the ongoing investment in the AI it's that don't put all your eggs into one basket um i think diversification we think is is the best recipe for uncertainty for the ongoing build out of AI and it's starting to spill over into other areas and other sectors besides just technology just look at kind of what c h robinson was discussing with their investors in the most recent earnings call just the productivity unlock that this technology is is disseminated across the economy we think is a powerful factor that probably is a little bit underappreciated in other sectors other asset classes besides just U.S. large cap technology. However, there are

additional reasons to be optimistic for kind of what AI looks like next year. Scaling laws from Gemini 3 as well as chat GPT 5.2 continue to be intact, which provides the incentive for hypers to continue to invest. And you just saw with the earnings announcements from Micron, that's having a benefit to their business. I mean, gross margins that are 12.5 points of expectations for the second quarter, we think, is just a remarkable feat. And, you know, that puts, you know, a run rate earnings in the picture of $30 plus. And so it's, it's interesting to see just this continuing to play out. But diversification, again, is your best friend in these environments. Doug, backing up and looking at the overall economy, what's the role of the consumer,

especially the working class consumer? We talk about the case shape of this thing. Can the luxury consumer continue to bail out the rest of us? In my view, the luxury consumer cannot continue to bail out the entire economy. In our view, and you mentioned the K-shaped economy, in our view, the lower leg of the K, when it comes to the bifurcation among consumers, is more important than the upper leg of the K. We always have the rich. Daddy Warbucks, according to the little Orphan Annie cartoons, did quite well. well during the depression, and I imagine his fellow club members did as well, but we still

have the depression. It is the lower leg of the K that is the marginal consumer. If you break the American households into their five income quintiles, in our view, what matters the most is those middle three quintiles, and they are increasingly struggling. So what I think in terms the K, is that the ranks of the lower leg of the K are growing with each month that we have soft payrolls data, soft job creation. And therefore, that lower leg is getting more and more important. And I do not believe that the upper leg of the K can carry the banner for the overall economy. So in light of that, Doug, are you concerned that the labor market could tip the economy into contraction?

I mean, we heard from Fed Governor Chris Waller earlier today. On CNBC, he was dovish. He tends to be dovish, perhaps more devious than expected today. But he, again, talked about his concern about the softening of the labor market and the fact that he has that case or is making the case that we should continue to see steady cuts back down to a neutral rate that's lower than where it is now. I think Governor Waller has been right on the money in terms of suggesting to his fellow FMC members that they look through the one-off impact of the number. inflation from tariffs, and that they focus more on the full employment mandate, because I do think the full employment mandate is a threat, because just as you suggested, yes, I do believe the labor market could tip the overall economy into contraction, could spell the end of the expansion.

We have incredibly concentrated job growth. As much as we talk about the equity market being led by just a handful of issues. When we talk about how narrow the breadth is in the equity market, the job creation so far this year, it has been all about health care and social assistance. That has been really the only game in town year to date. And in particular, the only game in town since payroll's growth slowed to an anemic pace beginning in May. And unfortunately, those jobs don't pay real well. The only other sector that has contributed since May has been leisure and hospitality, which also doesn't pay well. So what we have is all the job creation is in two spaces that don't pay well.

Okay. Matt, I want to get your thoughts on this, especially since, and we've known, and CNBC's been reporting on the fact that Governor Waller would be meeting with President Trump this afternoon. After that interview, if you look at Kalshi and you look at the odds of who the next Fed chair could potentially be, His odds, as he was talking, actually jumped. We're showing you that versus Kevin Warsh. I think the odds have been pretty steadfast here for Kevin Hassett. How much does the pick around next Fed Chair matter to this market for 2026?

That's a good question. I think the context we all need to keep in mind, though, it's one vote in terms of the nomination. You know, certainly the chairman can persuade other members of the voting committee. But, you know, looking at, you know, who gets the nominating. I don't necessarily think there's going to be a huge swing factor in the ultimate outcome of policymaking decisions coming from the Federal Reserve, again, just because it is one vote, not all members of the committee. You know, I think just to kind of, you know, add on to a few comments about the labor market

and how that plays into the Fed decision making, I don't think the labor market is going to dramatically shift between now and when we get a new nomination announcement. And so, you know, really what side of the mandate is that new governor going to going to favor. And ultimately, what we've seen is more consistency around the labor side of the mandate being the most important. Okay. Matt Stuckey and Doug Pita. Thanks for joining us. And now to the big IPO of the day, end of the year, Medline, jumping in its debut after pricing above the range. Leslie Picker is joining us now with more. Hi, Leslie. Hey, Morgan. It priced just below the high end of the range. And this is the largest IPO of the year, the largest health

care IPO ever and the largest sponsor-backed listing on record. Medline finishing its debut day up 41 percent to $41 per share, higher than its IPO price, of course, of $29 per share. The company which makes supplies products used in labs and surgeries sold more shares than initially planned in an upsized deal more than $6 billion. Medline has been private for 58 years, with most of its tenure family owned until its buyout by a consortium of private equity firms in 2021. The IPO market cap is about $20 billion higher than the price, Blackstone Carlisle and others paid for the company four years ago. The company issued all the stock in today's offering, meaning the P.E. firms didn't sell into the IPO, so Medline plans to use the proceeds to pay down some of its debt. Medline has about $17 billion worth of debt.

Today's performance, though, with shares up 41% bode well for the 2026 IPO market and for the potential for other private equity-owned companies to find their way into the public markets. Of course, that, as we discussed yesterday, has really been a challenge over the past few years leading to quite the backlog, guys. All right. Leslie Picker, thank you. Next on overtime, the Hollywood soap opera continuing today as Paramount and Netflix wrestle for Warner Brothers Discovery. We'll have the latest. And if Silver War's stock, it would be the eighth best in the S&P 500 this year, just a few percentage points behind Palantir. Up next, we're going to talk to a Silver CEO about this record rally.

Silver's prospects for more gains in 2026. Overtime is back in two. Let's get you caught up on the latest in the Warner Brothers Discovery. opera up today. It's board recommending shareholders reject Paramount's unsolicited bid for the company. Paramount, not backing down, saying it offers superior value and certainty and alluding to the possibility that WBD's current deal with Netflix could face regulatory hurdles. Netflix co-CEO Greg Peters telling CNBC he's confident the Netflix deal would get approval. Well, take a look at the move higher in silver. It's up over 30% in the past month. It's

notching its 13th record of the year just today. That's boosted shares of silver. makers, silver miners, like Pan American Silver, which is up a whopping 144 percent this year. So what's driving these big moves higher? Well, joining us now for an exclusive interview is Michael Steinman, CEO of Pan American Silver. Michael, welcome to the show. Thanks for joining us. Thanks for having me. So what is driving silver to these record levels? Well, there's really two things to silver, right? A, it's a really important medal for the economy. It's a critical metal actually right now declared in the U.S. as a critical medal and added to the critical strategic list for metals in November.

So you have a lot of uptake on the industrial side, about 65% of the silver is used up for that. The biggest use is solar panel production. But any electronic you use has silver in it. Silver is the best electric conductor in the world. So any fast connection you need in your computer, in your cell phone, AI comes to mind, data centers, you need a lot of silver for that. So that's a big use where silver is used up. And then obviously the investors come to mind here as well that buy silver for the same reason. And people buy gold right now.

And so together, those two uses really push the silver price up to this levels. Yeah. And in terms of that second piece of it, this idea of a debasement trade and silver playing catch up to gold this year, there's also been a lot of chatter about a short squeeze here and about concerns about where the inventory actually sits for the silver versus where it's being traded against or where it needs to be. How to think about that? Right. Well, you know, when the discussions started about possible tariffs on silver, of course, silver moved from London to the U.S.

Quite a bit has moved back to London. So that silver is available. It just takes time to move it from one place to the other. But that doesn't change on the fact that we see really a deficit here, a structural deficit on silver for the last five years. we just don't see more increased production from the mining side, but a huge increase in offtake, as a set, industrial and investor side, and with that, really, we see that shortage of the silver amounts we have available, and hence, you know, the fast increase in the silver price.

Michael, any long-term chart several years you look at of silver related to it, it just looks weird. I mean, this year 2025 just does not seem to fit. So for the folks out there who are wondering, is this just some topy excitement? I mean, what would you say? It's connected to this AI thing. As you mentioned, that certainly has driven a lot of valuations, and it's starting to drive some questions. Yeah, look, silver, 75% of the silver is actually produced as a byproduct from copper production. So it's not from primary silver miners like an American silver.

But copper is already an all-time high. So we see copper at full production. We don't have any very, very big projects coming on over the next few years on the copper side either. So there's not much more silver coming in play here in the future. And so hence that deficit on the mine production side will continue. And, you know, we obviously know all where we're going. This will go towards more electrification in the world. And then we see starting, like self-driving cars, et cetera, et cetera.

So that will require a lot of silver in the next coming years. Well, so if there is a supply issue, doesn't that suggest that this is a trade? Because eventually, you want to imagine there will be more silver supply on the market, and those who are looking to hold this long term might need to factor that in. Absolutely. I mean, as I said, look, if there's more copper mines or sinkments coming in production, we will see more input coming, but all the big projects I see out there are many years out there. And I think over the next few years, definitely we're going to see.

a continued deficit in the silver market. And obviously, if that is in combination with investment interest, we're definitely going to see high prices if that happens for sure. You've been acquisitive. You made an acquisition just earlier this year. Will you continue to do that to try and, I guess, up your stakes in mines and be able to bring more of the silver and other materials that come out of the ground with it online?

Yes, we have a combination, really, of a big exploration success, and we had a very large project in Mexico that we actually found in our portfolio during exploration in the last few years. But acquisition is always the kind of the second part of growth for our company. It always has been over the last 30 years and we definitely will continue to grow the company here

for the future as that demand on the silver side will increase. All right, Michael Steinman. Thank you. Thank you very much. Well, they say the way to get rich quick is to get rich slow. So this old school mystery stock, is it a better bet than a former AI high flyer? Mike Santoli is going to be here to say.

And President Trump turning up the heat on Venezuela. Oil higher today, bouncing off of what was a nearly five-year low. Crude is now on pace for a fifth straight monthly decline. But overtime is coming right back. So stay with us. Welcome back to overtime. bring in senior markets commentator, Mike Santoli, looking at how the market is handling the recent turbulence in the AI trade. Mike? Yeah, John, so with some difficulty, as today's

index performance showed, but there is still this clear preference shifting among investors away from the AI-levered big bellwethers to other parts of the so-called real economy. So banks versus invidia on a year-to-date basis shows you that KBWB is an ETF for the KVW Bank Index, which is really dominated by the very largest institutions like, 40% the big five banks. So clearly this is only a year-to-day chart on multiple years at NVIDIA's way ahead. But, you know, NVIDIA is now in about a 20% pullback from its high. It also is trading at a broad market multiple in terms of forward P.E. So it's getting less expensive. The earnings aren't going down just when people are willing to pay for it has gone

down. Now, take a look at another way of observing this, which is Oracle's market cap relative to Johnson and Johnsons. They're meeting here right at a half trillion dollars. You saw the massive bulge toward close to a trillion dollars for Oracle and the excitement about its data center business. Now that's almost all come out of it. Of course, slow and steady. J&J did nothing for years and then has recently come back into favor. Also kind of stark in the sense that people are concerned about Oracle's balance sheet, taking on all this debt to do the buildout.

And J&J is one of only a couple of triple A rated credits still in the market, guys. Mike, not that traditional banks are the only ones involved in financing this AI infrastructure buildup, But are you seeing them, those stocks influenced at all by that piece of the AI trade? And could that have something to do with the shift there? Not a lot. I mean, certainly I think the general aggressive capital raising environment is helping the banks as an underwriter, not as much as a direct lender in terms of it being a large allocation for them. But I think you are seeing other parts of the credit markets maybe get stressed in terms of how much capital is being demanded.

of them. So it's private credit. It is to some degree, maybe sort of the lower end of investment grade bonds and then some of these kind of special purpose vehicles that are being structured to try to invest in data centers. So for now, the large banks seem to be much more riding the wave of higher activity levels as opposed to, you know, than being real beneficiaries directly of the AI buildout. Okay. Mike Santoli will see a little bit later this hour. Thank you. Time for a CNBC News Update with Courtney Reagan. Hi, Cort. Hi, Morgan. U.S. and Russian officials will reportedly meet Miami this week to continue to continue negotiations on ending the war in Ukraine. Politico reports U.S. envoy Steve Whitkoff and President Trump's son-in-law, Jared Kushner, will be part of the U.S. delegation. The two just held marathon talks with Ukraine and Berlin earlier this week as the U.S. pushes Ukraine to accept concessions to end the nearly four-year conflict. And Caroline Ellison, the star witness in the trial of FTX founder Sam Bankman-Fried, has been transferred out of prison.

The Bureau of Prisons confirmed Ellison was moved to community confinement in mid-October, which means she was transferred to either home confinement or a halfway house. She is the former CEO of FTX sister investment firm Alameda Research and was sent into two years in prison last September for her role in the fraud case. And the Senate confirmed billionaire SpaceX astronaut Jerich Isaac Men to become NASA's 15th leader. He still needs to be sworn in. His confirmation comes months after President Trump withdrew him from kinsideration over concerns about his close ties to Elon Musk, but the president renominated him in November. Morgan, I know you know him well. Back over to you.

I do. He's the founder of Shift 4, a publicly traded fintech company as well. Courtney Reagan, thank you. And add Astra to Administrator Isaacman now. That's a year in the making. Coming up, defense names in the president's crosshairs today. The administration reportedly considering an executive order limiting government contractors' ability to buy back shares, pay dividends, perhaps more. Raising a lot of questions. We're going to dive into what it could potentially

mean for the sector. And Robin Hood, hoping to parlay its stock market success into the predictions market. We're going to talk to an analyst who says the stock's a good bet. Be right back. Welcome back to Overton. time stock sliding today. The Dow and the S&P both falling. The S&P 500 down more than 1%.

1.1%. The NASAC taking the worst of it, though, down 1.8%. AI buildout and spending in focus once again, specifically concerns about it. It was another rough day for Oracle, funding for its data center project, still on after reports that Blue Owl Capital had backed out of funding that project. But Oracle and its partner related digital telling CNBC they have a different source lined up for that. Still, that didn't really help Oracle shares, which are down nearly 50% from the all-time high that was hit back in September following those earnings. Micron earnings, though, those were just out. And if you could take a look right there, that stock is jumping. It's up 5% right now right here in overtime. $4.75 a share. The estimate

was $3.95. Revenue is also topping expectations. And it sees second quarter earnings in revenue significantly, and that's putting it mildly on the revenue side, higher than the current forecast, so those shares are popping. Meanwhile, Robin Hood is expanding its prediction market offerings, adding NFL parlay and prop vets. Users will be able to combine up to 10 outcomes across NFL games and players, and it's expected to launch in the beginning of next year. Robin Hood shares are down today, but have soared this year, up 210%.

That's 3x outperforming the S&P 500. Truest initiating Robin Hood coverage today with a buy rating and a price target of $155 a share, citing a combination of strong growth and profitability as justification for today's lofty valuations. So, joining us now is Truist Securities Analyst, David Smith. David, welcome. Okay, all of this betting feels like a bit much to me. Sort of reminds me of the online poker boom. What was it 15 years ago?

What's the risk if consumers culturally pull back on risk or if there are some regulatory issues down the line? Thanks, John. That is certainly a risk, but all the trends lately have really pointed to, you know, increased risk-seeking and volatility from retail investors. You can see that with, you know, increased investment in cryptocurrencies, options, particularly zero DTEs. You know, this has kind of been a secular trend for a number of years now, and I think Robin Hood is well positioned to offer that to investors, just given its mix of products and its, you know, trading phase today. Do you have a signal in mind for whether that might be ending? Because, you know, risk, you can take it on until the floorboards sort of snap. No, that's fair. I do think, though, when you look at Robin Hood's monthly data, you know, while overall volumes have dipped a little bit with the decrease in prices, you know, from growth stocks or cryptocurrency, overall there hasn't really been the same decline in average, you know, trades and activity on a per day basis. So, yeah, I do think that, you know, this can continue even with a little bit of

choppy market activity for Robin Hood's users. David, has Robin Hood continues to expand out and invest in different areas of future revenue growth? Does it continue? Does the stock continue to be so correlated to cryptocurrencies? Well, I think over time that that should go down. You know, the stock still has a decently high beta to cryptocurrencies and Bitcoin today. But going forward, crypto trading revenues really should decline a fair amount in terms of how much of Robinus revenue growth they represent as prediction markets grow, as the stock becomes more geared towards net interest revenues as well and lending to customers in various regards. So over time, I could certainly see a case for that correlation of crypto to decline in

Robin Hood to behave a little bit more idiosyncratically. And as I look at your report here, I mean, you talk quite a bit about profitability, margin expansion. How does that play out? So Robin Hood has some really attractive operating leverage and incremental margins in its business model. It has a pretty high fixed cost base. So any increased revenue it gets as it expands with new users and new products, a lot of that should drop to the bottom line. And, you know, that also frees up additional capacity for up and to invest and really create a flywheel almost to drive future growth as well. Okay, David Smith, thanks for joining

us. Thank you. Well, the holiday season is shaping up to be a copycat Christmas as shoppers avoid paying up for the big brand names in favor of knockoffs. What that means for retail stocks straight ahead. Welcome back to overtime. Check out shares of Gap. A big winner today, hitting its highest level since May. And that is because Wells Fargo, Barrett, and Tesla Advisory Group all have upgraded the retailer to outperform this week. And each firm raising their price targets on the stock as well. The firm citing a variety of reasons for the bullish outlooks, including brand momentum, managing tariff costs, and improving margins. This has been a turnaround story that keeps on going. Indeed. Speaking of retail, one week until Christmas Eve, the reindeer are stretching their hamstrings. And this year, consumers are choosing not to pay up for big brand names. Courtney Reagan has the details. Cort.

Hi, John. It's good to see you. So a growing number of Americans don't seem to really care about labels. You can call it a dupe, generic, unbranded or an unknown brand. As long as the quality is close enough, consumers are becoming brand agnostic. Two-thirds of Americans have bought dupes or unbranded goods with apparel taking the top category and then handbags footwear and fragrances, according to Statista. It's helpful for gift givers on tight budgets this season who still want to give wanted presents, but bad for companies to work. worked pretty hard on the brand equity. Opportunity still for others. So fast fashion retailer Zara, it built its business model on the look for less, quickly imitating runway fashion for inexpensive prices. And those Zara shoppers are also cross-shopping for apparel on Amazon, more than any other brand. Horsite also estimates Amazon ease the U.S.'s top seller of apparel for two years running, in part because of the rise of its unknown brand apparel popularity that social media influencers often pushes dupes of other more expensive brands from Lulu Lemon to anthropology. In fact, Lulu Lemon is doing Costco currently, as the

yogaware maker alleges that Costco is selling illegal copycat versions of its design, which it argues confuses the consumer. Now, e-commerce site quince. It's an entire D to C business on making the look for less. From diamonds to cashmere and sheets, it's directly comparing its products to the name brand on the product item page, like this puffer coat for $200 instead of more than $1,200 for the Canada Goose Virgin. Quince has a reported valuation of $4.5 billion. It's big business to do that look for less. Back over to you guys.

This seems like a big reversal, or at least a huge evolution from the direct-to-consumer push of 10-ish years ago where there were unique designs, not cheap, not available at those huge stores like Costco and Amazon that are selling now these looks for less, no? Yes, exactly, exactly. So I think, you know, you're talking about maybe sort of the all-bird shoe or something like that. It was pretty identifiable as a brand that was new and unique and customers wanted it.

And now, you know, they may love the idea of a higher brand or higher, more expensive at leisure wear, like an aloe or a Lulu Lemon. But as long as quality is pretty close, the design is similar. They know it's not Lulu Lemon or Allo in most cases, and they're okay with that. They're going to be okay with that Amazon version, especially it turns out in surveys if it comes really fast and with free shipping. Go figure. All right. Courtney Reagan, thank you.

Thank you. President Trump is reportedly set to sign an executive order. It's considering it targeting dividends and buybacks at defense contractors. Up next, the top analyst tells us how. that would impact both the industry and investors. Plus, this mystery stock has had a very rough year. Now one Wall Street firm is giving investors another reason to drown their sorrows. Details when overtime returns.

Welcome back to overtime. Investors want to go where everybody knows their name today. The stock, one of the biggest losers in the S&P 500. City downgrading the maker of Jack Daniels to sell from neutral, trimming its price target to 27 bucks from 30, citing troubling spirits, trends, and expectations that a recent sales bump from overshipments will evaporate in the first half of next year. Well, check out the move lower on aerospace and defense stocks. The ITA, ETF, underperforming the broader market.

Big names under pressure, including GE Aerospace, RTX, and Huntington Ingalls. However, aerospace and defense stocks are on track for their best year since 2013, and actually some of those names have been leading the gains this year. But the selling today, this is driven by reports, which I can confirm, that a draft executive order is being worked over and considered by the Trump administration that could, if it comes to pass, limit stock buybacks, dividends, even potentially curb executive compensation for the defense contractors. This would be tied to certain projects if they're delayed and or over budget. So joining us now for more is Sheila Kailu. Jeffrey's aerospace and defense analyst. And Sheila, it's great to have you back on the show. Welcome.

Thank you, Morgan. All right. Now, lots of questions about this EO on whether it comes to pass and if it does what the devil will be in the details, but just based on what we do know right now, how unusual, how unprecedented would this be for the sector? I think it would. I think defense is a very hard business. Let's not forget. So to put more of a penalty on these defense primes would be really tough. So we've seen baiting on contracts pretty difficult where contractors move out of programs. they non-bid because programs make 10% operating margins and on the cash basis, they make 5% operating margins. So it becomes very difficult for contractors to be profitable in the space. So to put even more penalties on it, I think would be difficult. And they do already reinvest quite a bit of money back into R&D. But how does that compare to, because I know you've done the math on this, how does that compare

to dividends and buybacks? And would this actually have the right effect, meaning policy like this? driving even more money into research and development? Yeah, so, you know, the executive order, the potential executive order made us do some math, and it was actually pretty enlightening. When you look at R&D, only company funded, not customer funded, plus CAPX for the defense primes,

over 2023 and 2024, they equated to about $40 billion. That compares to the five defense primes, giving back in dividends and in buybacks, $50 billion. So about a $1.3 billion investment to giving back ratio. Lockheed looks the worst as it's one of the highest repurchasers in the space. But in general, these primes have very balanced capital allocation. So they're not doing inefficient use of capital where they're giving 100% buybacks levering up to do that. That's not the case at all. They have an equal investment to shareholder returns focus.

Sheila, the aerospace and defense ETFs were, you know, pretty hot heading into about August and up a bit from there, but nowhere near the growth from there. How much is the trade there influenced by how much saber-rattling there is in the broader world? You know, I think aerospace and defense

is a great sector to be in. We think about aerospace commercial needs for aircraft growing 3% aftermarket growing 8 to 10%. So the commercial aerospace side of the business, business, GE, RTX are great assets to invest in. I think where it becomes more difficult with the defense primes is just the lack of clarity in budgets. They don't have five-year budgets, so they don't have an investment cycle that they want to see and invest towards. So, you know,

that sometimes puts difficulty in place for them to generate proper returns on programs. So I understand why the executive order would look from an outsider's perspective like it makes sense, but in reality, the defense primes and in general, the aerospace and defense complex, are very efficient enterprises that take care of investments internally, but also shareholder needs. How much are they influenced by how much Europe actually ends up spending on its own defense, which has been an exciting idea for many of this year? You know, I think that's one of the upside drivers. If we think about the U.S. defense budgets, maybe they're growing three to five percent. Golden Dome could be a topper on top of that, but it's been a relative disappointment.

So where does the upside come in? It comes in from international growth, where NATO spending could go from 2 percent to potentially 3.5 percent on actual equipment. That's 280 billion in actual investment into the defense prime's hands and global, obviously defense contractors, including European ones. So what we've seen is double digit growth from the primes in terms of their international defense growth. Archiex is one of the most exposed, with 44% of their defense backlog exposed to European spending. So we've seen that growth, but not nearly as much.

If you think about 280 billion per annum, that's a big boost, even if 25% of that comes back to the U.S. Primes. Some other names in our coverage, like Elbit, it's an Israeli-focused defense contractor, has been a huge year to date. Obviously, it supplies 20% to Israel, 20% to Europe. it's benefited from that as well. Yeah. And, of course, we're talking about international sales. We're talking about a higher margin business, typically, usually, for the American defense primes. I do want to get your thoughts as we await President Trump addressing the nation tonight on what we're seeing with this blockade in Venezuela and how it speaks to the role that geopolitics, particularly with a bigger focus more on this hemisphere, has funneling back to the defense contractors.

You know, I think defense contractors need a playbook. They need defense. clarity. But what we've seen with the Trump administration, which has been really great, is they've funded smaller contractors as well as larger contractors. They've worked hand in hand with them. That's why we've seen a number of defense tech IPOs come into the space. You know, private companies like Serronic potentially benefiting from that era environment, tons of companies are benefiting from the investment, but also the global threat environment. I think this administration is recognizing that it's not all about large contracts that have been parts of the defense playbook for 20 to 30 years, it's about also investing in smaller contractors

and their ability to innovate quickly in the space. As the global threat environment is not only the Middle East, it's not only China, it's not only Russia, but it's across the globe. All right, Shaila Kailu. Great to have you on. Thank you. Thanks. Up next, Mike Santoli is back. He's looking at the prospects for a capital raising bonanza next year, whether that would be a good or bad thing for Wall Street and your money. Also, shares of course, Sarah initially hired today. closing lower Udeme hire after the two announced merger plans this morning. I spoke with Coursera's CEO Greg Hart on Squabox about how UDMI's enterprise customers will help grow the combined platform. Well, Udeme has a thriving enterprise business with 17,000 enterprise customers, and they leverage AI and MCP to deliver that in the workflow for some of their enterprise customers.

We believe there's an opportunity to combine that with our strengths on the consumer side. and really provide a much better foundation. Obviously, all of UDEMI's enterprise customers will also gain access to our amazing catalog of content from the leading universities and industry partners. Welcome back to overtime. The capital raising bonanza that was predicted a year ago

has not come to fruition, but what's in store for the new year? Let's ask Mike Santoli. Mike? Yeah, John, kind of dialing ahead that anticipatory. of a very busy year next year. Now, parts of the underwriting area, like high-grade debt, have been very, very busy. But the more aggressive side, not so much. Still, the stocks are

really performing as if we do expect some of this activity to go into next year in a more accelerated way. That's the big banks, ETF, I mentioned before. This is security broker dealers. So they've kind of started to lag just a little bit lately, but I still do think most people expect busy capital markets next year. Here's how it looks. This is the more aggressive side of capital raising. It's IPOs, it's high yield debt and leverage loans as a percentage of GDP. A lot of upside to go, even to get to average levels of the last 15 or 20 years or so. Now the economy is much bigger, but we'll see

if that kicks in. We've got some big AI companies that everyone thinks might be very large offerings eventually on the slate, perhaps as early as 2026, guys. Yeah, we will see. Mike Santoli. Thank you. In the meantime, we get CPI tomorrow, inflation read. And over the next two days, we're going to get six different major central bank decisions, which Rick Santelli was telling us about as well. So something to keep an eye on as the Fed has cut last week, but many of these names are expected to sort of stay on hold or even in the case of Japan hike later this week. It has been quite another huge year

for the markets overall. Questions about a Santa Claus rally, but also how much you just have to look ahead to next year and whether you can have another blowout. Yeah, and of course we get December Triple Witch on Friday as well. That's going to do it for us here at overtime. Fast money starts now.